Forex Day Trading - Why You Will Lose Your Money Fast

Forex Day Trading - Why You Will Lose Your Money Fast

by kelly Price

Forex day trading is simply an odds on way to wipe yourself out despite this more novice forex traders try day trading than any other methodology. This article will show you the facts and why you are guaranteed to lose at day trading.

Before we look at the reasons why traders lose lets dispel the myth that vendors try and sell that their forex day trading systems can make you profits. There all over the net promising you huge gains and low risk and they come with a track record of supposed gains.

The track records are not real they are all simulated in hindsight KNOWING the closing prices and you will always see a disclaimer like the one below ( standard CFTC one ) or similar. Read it carefully:

"CFTC RULE 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown".

So there you have it - vendors can make up any track record they like for their system and simulate anything they want. If course anyone can make profits in hindsight knowing the closing prices - but trading forex for real is a different ball game.

You don't know the closing prices and that makes trading a bit more difficult.

In hindsight you can prove anything and I would be a millionaire several times over if I knew tomorrow's closing price today and it's odd that normally sane logical people buy these systems and never question the facts behind them.

So why doesn't day trading make money?

Pure and simple - You have no valid data to help you calculate the odds.

You have millions of traders trading trillions of dollars and to say that you can measure what this huge diverse amount of opinions will do in a few hours or a day is ridiculous. Volatility can and does take prices anywhere in a day and support and resistance levels cannot be used to get the odds in your favor.

The myth of day trading is small regular profits - the reality is lots of losses and a few profits in between and the erosion of equity to zero.

If you don't believe me try and find a forex day trading system with a real time track record over the longer term and you will search but never find one. If you want to make money at forex don't day trade leave that to the greedy and naïve traders and concentrate on getting the odds in your favor - that means long term trend following or swing trading.

If you want to win at forex try the above and get the odds on your side.